Flagstar Bancorp (NYSE: HSBC) and HSBC (NYSE:HSBC) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation & Earnings

This table compares Flagstar Bancorp and HSBC’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Flagstar Bancorp $997.00 million 1.96 $63.00 million $2.47 13.72
HSBC $53.82 billion 3.35 $9.77 billion N/A N/A

HSBC has higher revenue and earnings than Flagstar Bancorp.

Institutional and Insider Ownership

83.2% of Flagstar Bancorp shares are held by institutional investors. Comparatively, 2.6% of HSBC shares are held by institutional investors. 62.9% of Flagstar Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

HSBC pays an annual dividend of $2.00 per share and has a dividend yield of 4.5%. Flagstar Bancorp does not pay a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for Flagstar Bancorp and HSBC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flagstar Bancorp 0 1 9 0 2.90
HSBC 1 8 4 0 2.23

Flagstar Bancorp currently has a consensus target price of $40.71, suggesting a potential upside of 20.10%. HSBC has a consensus target price of $9.00, suggesting a potential downside of 79.96%. Given Flagstar Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Flagstar Bancorp is more favorable than HSBC.

Profitability

This table compares Flagstar Bancorp and HSBC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flagstar Bancorp 7.31% 11.13% 0.92%
HSBC N/A N/A N/A

Risk & Volatility

Flagstar Bancorp has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, HSBC has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Summary

Flagstar Bancorp beats HSBC on 9 of the 13 factors compared between the two stocks.

Flagstar Bancorp Company Profile

Flagstar Bancorp, Inc. operates as a savings and loan holding company for Flagstar Bank, FSB that provides commercial, small business, and consumer banking services to individuals and businesses in the United States. Its Community Banking segment offers various products, such as checking accounts, savings accounts, money market accounts, certificates of deposit, consumer and commercial loans, commercial real estate loans, equipment finance and leasing, home builder finance loans, and warehouse lines of credit. It also provides other financial services, including consumer and corporate card services, customized treasury management solutions, merchant services, and capital markets services, such as loan syndications, as well as wealth management products and services. This segment serves consumer, business, and mortgage lending customers through its branch banking, business and commercial banking, government banking, warehouse lending, and loans held-for-investment (LHFI) portfolio groups. The company's Mortgage Originations segment originates, acquires, and sells one-to-four family residential mortgage loans through home loan and national call centers, Internet and unaffiliated banks, mortgage banking, and brokerage companies. Its Mortgage Servicing segment offers services and subservices mortgage loans; and the servicing of residential mortgages for its LHFI portfolio, as well as noninterest-bearing escrow services. As of January 23, 2018, the company provided banking services through 99 branches in Michigan; and home loans through a wholesale network of brokers and correspondents in 50 states, as well as 89 retail locations in 29 states. Flagstar Bancorp, Inc. was founded in 1987 and is headquartered in Troy, Michigan.

HSBC Company Profile

HSBC Holdings plc provides banking and financial products and services. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments. The Retail Banking and Wealth Management segment offers personal banking products and services, mortgages and loans, credit cards, insurance and investment products, savings products, international services, and wealth solutions and financial planning services, as well as telephone, Internet, and mobile banking services. The Commercial Banking segment provides services and financing for buyers and suppliers throughout the trade cycle; liquidity and cash management services; capital financing, including debt, equity, and advisory services; and insurance and investment products, such as business and financial protection, trade insurance, employee benefits, corporate wealth management, and other commercial risk insurance products to small enterprises, mid-market companies, and multinationals. The Global Banking and Markets segment is involved in the provision of advisory, financing, prime, research and analysis, securities, trading and sales, and transaction banking services to corporates, financial institutions, and resources and energy groups. The Global Private Banking segment provides private banking, and investment and wealth management services to business owners, entrepreneurs, and senior executives and their families. The company operates through approximately 3,900 offices in 67 countries and territories worldwide. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

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